Correlation Between Genting Malaysia and Lysaght Galvanized
Can any of the company-specific risk be diversified away by investing in both Genting Malaysia and Lysaght Galvanized at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Genting Malaysia and Lysaght Galvanized into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genting Malaysia Bhd and Lysaght Galvanized Steel, you can compare the effects of market volatilities on Genting Malaysia and Lysaght Galvanized and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Genting Malaysia with a short position of Lysaght Galvanized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genting Malaysia and Lysaght Galvanized.
Diversification Opportunities for Genting Malaysia and Lysaght Galvanized
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genting and Lysaght is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Genting Malaysia Bhd and Lysaght Galvanized Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysaght Galvanized Steel and Genting Malaysia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Genting Malaysia Bhd are associated (or correlated) with Lysaght Galvanized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysaght Galvanized Steel has no effect on the direction of Genting Malaysia i.e., Genting Malaysia and Lysaght Galvanized go up and down completely randomly.
Pair Corralation between Genting Malaysia and Lysaght Galvanized
Assuming the 90 days trading horizon Genting Malaysia Bhd is expected to under-perform the Lysaght Galvanized. But the stock apears to be less risky and, when comparing its historical volatility, Genting Malaysia Bhd is 4.61 times less risky than Lysaght Galvanized. The stock trades about -0.19 of its potential returns per unit of risk. The Lysaght Galvanized Steel is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 234.00 in Lysaght Galvanized Steel on August 31, 2024 and sell it today you would earn a total of 49.00 from holding Lysaght Galvanized Steel or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Genting Malaysia Bhd vs. Lysaght Galvanized Steel
Performance |
| Timeline |
| Genting Malaysia Bhd |
| Lysaght Galvanized Steel |
Genting Malaysia and Lysaght Galvanized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genting Malaysia and Lysaght Galvanized
The main advantage of trading using opposite Genting Malaysia and Lysaght Galvanized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genting Malaysia position performs unexpectedly, Lysaght Galvanized can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lysaght Galvanized will offset losses from the drop in Lysaght Galvanized's long position.| Genting Malaysia vs. Binasat Communications Bhd | Genting Malaysia vs. Sports Toto Berhad | Genting Malaysia vs. Petronas Chemicals Group | Genting Malaysia vs. ES Ceramics Technology |
| Lysaght Galvanized vs. Eversafe Rubber Bhd | Lysaght Galvanized vs. Senheng New Retail | Lysaght Galvanized vs. Media Prima Bhd | Lysaght Galvanized vs. Kluang Rubber |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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